Iran to Change Currency From Rial to Toman Amid High Inflation
What’s new: Iran is set to change its national currency from the “rial” to the “toman,” after its parliament approved details of an amendment to the country’s Monetary and Banking Act on Monday.
The plan is set to effectively cut four zeros from its currency, making each toman worth 10,000 rials. The rial will remain legal tender alongside the toman during a two-year transition period as Iran’s central bank implements the change, according to the nation’s Islamic Republic News Agency (IRNA).
What’s the background: Many believe Iran’s move is to offset the fallout from inflation fueled by U.S. sanctions. However, an economic expert cited by the official IRNA claimed that slashing four zeros from the national currency has nothing to do with the inflation rate, and is a neutral plan that would not impact the value of the country’s currency or commodities.
The Iranian currency was trading at about 42,000 rials per U.S. dollar on Saturday, according to its central bank. However, on the unofficial market, it was trading at about 160,000 rials per U.S. dollar that day, according to Bonbast.com, a platform which tracks the unofficial rate.
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